Even a freshly minted surveyor, architect or engineer knows it can be professional suicide to go into practice without professional liability insurance, also known as errors and omissions coverage.
Problem is, too many E&O policies fall woefully short.
Rather than provide security and peace of mind, the standard E&O policy can leave these professionals without adequate armor when they might need it most.
As a refresher, professional liability insurance is an important type of business insurance, especially for businesses that give advice or provide a professional service to clients. Surveyors, architects and engineers all need it to help pay for claims should a client sue over mistakes that lead to financial loss.
Typically, clients will only do business with you if you are properly protected. A good professional indemnity policy helps to provide not just you but also your clients with the assurance that there’s a policy in place in case things go wrong:
It’s not hard to imagine instances that can lead to trouble. Here are two examples of the sort of issues where an E&O policy can help.
Say you’re hired to complete a land survey for an addition to a home adjacent to wetlands. Your survey shows that the addition will not encroach on the wetlands, but after construction is complete, City Hall files a complaint against the homeowner. A professional liability insurance policy could cover the costs associated with your defense, as well as any settlement or judgment the town imposes.
OK, now imagine you’ve completed a survey for a commercial property. The owner begins excavating based on your report, but the contractor hits a gas line. The building has to be evacuated until the line can be repaired and gas service restored. The owner of the building sues you for lost revenue. A professional liability policy could cover your defense costs as well as any settlement or judgment, up to your limit of liability.
Standard E&O policies will cover defense costs in alleged professional negligence cases. They’ll also pay for libel or slander and copyright infringement. But there’s much more that a better policy will cover without costing you much more in premiums.
That includes coverage that reimburses you for the cost of sanctions imposed in disciplinary actions, including those related to OSHA regulatory fines.
There are also policies that provide coverage for reputation management, an often-critical factor when you’re sued.
Better still, the more robust policies include pre-claims help from the insurer, claims management services provided by experienced construction lawyers and risk management professionals and, finally, significantly higher limits than standard policies.
It’s a given that whether you’re a surveyor, architect or engineer, an E&O policy should be just as much a part of your professional life as the hard math you rely on to do your work. But just like anything else in your professional life, there’s no point in taking a half-measure approach in buying the right coverage.
Jeff Parent is an Insurance Advisor and Registered Professional Liability Underwriter at CCIG. Reach him at JeffP@thinkccig.com or at 720-330-7918.